Venture capital funds in the U.S. raised $7.7 billion in the first quarter of 2011, nearly doubling the $3.9 billion raised in the same period last year and the highest first-quarter total since 2001. At the same time, only 25 funds closed this past quarter--not just a dip from the same time last year but actually the lowest count of first-quarter closings since 2003.
http://vator.tv/news/2011-04-11-private-equity-and-venture-capital-up-and-up
It leads to increasing activity of venture incubators
http://vator.tv/news/2011-04-01-super-angels-create-incubator-for-incubators
2011/04/20
Why social media is so attractive for investors?
WallMart buys Kosmix for $300 mln. http://futurerating.blogspot.com/2011/04/walmart-buys-social-media-startup.html
It's a great example of "parking", a crucial VC skill that VCs don't like to talk about.
What is parking? It's finding a good acquisition for a startup that didn't do as well as you expected.
Venture capital is described as a "hits business" and that's true enough: a few exits produces the majority of the returns. 80% of VC profits comes from 2% of deals, a top European VC told us.
But that's only part of the story. A rule of thumb is that to be considered a good performer, a VC fund has to return three times its capital. But in many a VC fund, while 2X will come from the big hits, the third piece will come from smaller "long tail" exits, which individually might not make a big difference to the fund, but when added up can make or break it.
So "parking well" is a very important VC skill. And it comes down to the VC to park a company that hasn't been performing as well as expected, because most often they're the ones who have the industry relationships and the M&A experience, not the entrepreneurs.
VCs don't like to talk about parking because they'd much rather talk about helping startups grow into huge blockbusters than mitigating losses on underperforming investments.
And Kleiner Perkins is known in the industry for being great at parking.
In a talk at Stanford, when talking about how VCs need to be good at finding exits for their companies, straight-talking VC Mark Suster phrased it thus: "Are you Kleiner? Can you get $400 million for ngmoco when it probably wasn't worth it?," adding jokingly: "Oh, maybe it was worth it."
The point here isn't to diss mobile gaming company ngmoco (your writer enjoyed many wasted hours on Rolando, one of their hit games), but it pivoted several times in search of a business model and when the acquisition happened, many eyebrows were raised at both the price and the acquirer, DeNA, a big Japanese gaming company that had done practically no US acquisitions to date.
Read more: http://www.businessinsider.com/whrrl-pelago-kleiner-perkins-2011-4?utm_source=Triggermail&utm_medium=email&utm_term=10%20Things%20In%20Tech%20You%20Need%20To%20Know&utm_campaign=Post%20Blast%20%28sai%29%3A%2010%20Things%20You%20Need%20To%20Know%20This%20Morning#ixzz1K4SUq8VY
It's a great example of "parking", a crucial VC skill that VCs don't like to talk about.
What is parking? It's finding a good acquisition for a startup that didn't do as well as you expected.
Venture capital is described as a "hits business" and that's true enough: a few exits produces the majority of the returns. 80% of VC profits comes from 2% of deals, a top European VC told us.
But that's only part of the story. A rule of thumb is that to be considered a good performer, a VC fund has to return three times its capital. But in many a VC fund, while 2X will come from the big hits, the third piece will come from smaller "long tail" exits, which individually might not make a big difference to the fund, but when added up can make or break it.
So "parking well" is a very important VC skill. And it comes down to the VC to park a company that hasn't been performing as well as expected, because most often they're the ones who have the industry relationships and the M&A experience, not the entrepreneurs.
VCs don't like to talk about parking because they'd much rather talk about helping startups grow into huge blockbusters than mitigating losses on underperforming investments.
And Kleiner Perkins is known in the industry for being great at parking.
In a talk at Stanford, when talking about how VCs need to be good at finding exits for their companies, straight-talking VC Mark Suster phrased it thus: "Are you Kleiner? Can you get $400 million for ngmoco when it probably wasn't worth it?," adding jokingly: "Oh, maybe it was worth it."
The point here isn't to diss mobile gaming company ngmoco (your writer enjoyed many wasted hours on Rolando, one of their hit games), but it pivoted several times in search of a business model and when the acquisition happened, many eyebrows were raised at both the price and the acquirer, DeNA, a big Japanese gaming company that had done practically no US acquisitions to date.
Read more: http://www.businessinsider.com/whrrl-pelago-kleiner-perkins-2011-4?utm_source=Triggermail&utm_medium=email&utm_term=10%20Things%20In%20Tech%20You%20Need%20To%20Know&utm_campaign=Post%20Blast%20%28sai%29%3A%2010%20Things%20You%20Need%20To%20Know%20This%20Morning#ixzz1K4SUq8VY
2011/04/07
More exits in venture market
During the quarter, 109 venture-backed companies were acquired. Of the 45 deals where the acquisition price was disclosed, the total purchase prices added up to $5.9 billion.
http://ierarhia.blogspot.com/2011/04/vc-go-ipo.html
http://ierarhia.blogspot.com/2011/04/vc-go-ipo.html
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